Five-Year Examination of Utilization and Drug Cost Outcomes Associated with Benefit Design Changes Including Reference Pricing for Proton Pump Inhibitors in a State Employee Health Plan

BACKGROUND
The Arkansas State Employee Benefits Division (EBD) is a self-insured program comprising public school and other state employees, their spouses, and dependents. Previous research published in JMCP (2006) showed drug cost savings of $2.20 per member per month (PMPM; 37.6%) or annualized savings of $3.4 million associated with a benefit design change and coverage of the proton pump inhibitor (PPI) omeprazole over-the-counter (OTC) beginning in March 2004. On May 1, 2005, brand esomeprazole was excluded from coverage, with current users grandfathered for 4 months until September 2005. Reference pricing for PPIs, including esomeprazole but excluding generic omeprazole, was implemented on September 1, 2005, and the beneficiary cost share for all PPIs except generic omeprazole was determined from comparison of the PPI actual price to the $0.90 omeprazole OTC reference price per unit.


OBJECTIVE
To examine PPI utilization and drug costs before and after (a) excluding esomeprazole from coverage (with grandfathering current users) and (b) implementing a therapeutic maximum allowable cost (TMAC), or reference-pricing benefit design, for the PPI class in a large state employee health plan with fairly stable enrollment of approximately 127,500 members in 2005 through 2008 and approximately 128,000 members in 2009 Q1.


METHODS
The pharmacy claims database for the EBD was used to examine utilization and cost data for PPIs in a longitudinal analysis for the 61-month period from March 1, 2004, through March 31, 2009. Pharmacy claims data were compared for the period 14 months prior to esomeprazole exclusion (preperiod), 4 months during the esomeprazole exclusion (postperiod 1), and the ensuing 43 months of PPI reference pricing (postperiod 2). PPI cost and utilization data for the intervention group of approximately 127,500 beneficiaries were compared with a group of 122 self-insured employers with a total of nearly 1 million beneficiaries whose pharmacy benefits did not include reference pricing for PPIs.


RESULTS
Despite 79% of existing esomeprazole users being grandfathered during the 4-month esomeprazole-exclusion period (postperiod 1), the share of omeprazole OTC claims increased from 35.2% to 42.5% (+ 7.3 percentage points) of all PPI claims, and esomeprazole claims decreased from 16.7% to 12.0% (-4.7 percentage points), with little change in the use of other PPIs. The average allowed charge (price) per day of PPI drug therapy decreased in postperiod 1 by 8.9% from $2.81 to $2.56, while utilization increased by 2.2% from 1.83 days PMPM to 1.87 days PMPM; the net plan cost PMPM decreased by $0.40 PMPM from $3.78 to $3.38 (-10.6%), representing a reduction in spending of $35,664 per month while the average member copayment per claim was essentially unchanged. In the 43 months of reference pricing in postperiod 2, PPI utilization was essentially unchanged at 1.82 days PMPM compared with the preperiod (1.83 days PMPM) and 2.7% lower than the esomeprazole-exclusion period (1.87 days PMPM); however, price (charge per day) decreased by 38.4% during refer- RESEARCH ence pricing to $1.73 from $2.81 in the preperiod and by 32.4% compared with $2.56 in the esomeprazole-exclusion period, despite an increase in the average pharmacy dispensing fee to $5.21 per PPI claim. Net plan cost decreased by $1.87 PMPM (49.5%) to $1.91 PMPM during reference pricing compared with the preperiod ($3.78 PMPM) and by $1.47 PMPM (43.5%) compared with the esomeprazole-exclusion period 1 ($3.38 PMPM). Beneficiary costs (copayment per claim) for PPIs decreased to $1.24 PMPM ($23.27 per claim) compared with the preperiod ($1.37 PMPM, $24.95 per claim) and compared with the esomeprazole-exclusion period ($1.40 PMPM, $25.06 per claim). The reductions in net plan costs represented lower plan spending for the 43 months of reference pricing (postperiod 2) of approximately $9.4 million or an average of approximately $219,500 per month compared with the preperiod or $7.9 million (approximately $183,900 per month) compared with the esomeprazole-exclusion period. Compared with a group of self-insured health plans without pharmacy benefit reference pricing of PPIs, the cost savings over the 43-month period from September 1, 2005, through March 31, 2009, were approximately $7.2 million or $1.31 PMPM.


CONCLUSIONS
For this state employee health plan, the policy change that excluded esomeprazole from coverage but grandfathered current users was associated with a relatively small reduction in PMPM spending on PPIs compared with the subsequent policy change that applied reference pricing to the PPI class based on the price (drug cost plus dispensing fee) for omeprazole OTC. Over 43 months of reference pricing, net plan costs fell dramatically by 49.5% PMPM compared with the preperiod or decreased by 43.5% compared with the esomeprazole-exclusion period. While utilization was essentially unchanged compared with the 18 months before reference pricing, the average pharmacy dispensing fee per PPI claim increased, and beneficiary costs PMPM decreased.

• In the pre/post comparison, excluding esomeprazole from coverage was associated with a net plan cost decrease of 7.7% for PPIs (from $465,746 to $430,082 per month) or an average cost savings of $35,664 per month. Although not analyzed specifically, grandfathering exempted 79% of esomeprazole users and appeared to have limited the potential savings from this intervention. • In the pre/post comparison, reference pricing was associated with an immediate and sustained reduction in the net EBD cost from an average $3.78 PMPM in the 14-month preperiod to $1.91 PMPM during the 43-month postperiod, savings of $1.87 PMPM (49.5%) in the pre/post comparison or drug cost savings of approximately $1.31 PMPM ($7.2 million over 43 months) versus projected costs without reference pricing in a comparison group. • Compared with a group of health plans that did not implement PPI reference pricing, this health plan experienced a decrease in PMPM cost after subtraction of member cost share that was approximately 50% ($1.67) in the first 4 months but declined over the 43-month follow-up period to about $0.63 PMPM during the first 3 months of 2009. • The average member cost share per PPI claim was essentially unchanged in the esomeprazole-exclusion period compared with the preperiod ($25.06 vs. $24.95, respectively) and 6.7% less in the 43-month reference-pricing period ($23.27); PPI utilization was 1.83 days PMPM in the preperiod and 1.82 days PMPM in the 43-month reference-pricing period.

Five-Year Examination of Utilization and Drug Cost Outcomes Associated with Benefit Design Changes Including Reference Pricing for Proton Pump Inhibitors in a State Employee Health Plan
P reviously, we reported the cost and utilization of proton pump inhibitors (PPIs) associated with the decision by the Arkansas State Employee Benefits Division (EBD; Little Rock) to cover omeprazole over-the-counter (OTC) beginning in March 2004. 1,2 Because the PPIs constituted a substantial portion of the pharmacy benefit spending, 12% ($8.9 million) of the total drug budget of $74.6 million in 2003 for approximately 127,500 beneficiaries, the PPI class was targeted for a possible cost savings measure to be implemented if the necessary access to needed therapies could be maintained. 1 Based on cost considerations, the Drug Utilization and Evaluation Committee (DUEC) recommended making omeprazole OTC the preferred drug among PPIs. The EBD was paying, on average, more than $90 per prescription PPI (e.g., average brand omeprazole Rx cost to the EBD was $123.40, and average generic omeprazole Rx cost was $91.71 in February 2004). Because the average wholesale price (AWP) was significantly lower for omeprazole OTC (Prilosec OTC), there was a large cost savings opportunity. Analysis of 15 months of coverage of omeprazole OTC in this drug benefit plan showed $4.2 million in cost savings for the drug plan sponsor or approximately $2.20 PMPM. 1 The specific pharmacy benefit design change that produced the PPI cost savings was implemented in March 2004, when coverage was extended for a 42-day supply of omeprazole OTC 20 mg tablets at a $5 copayment and a $13 dispensing fee for pharmacists. [1][2][3] With the enhanced dispensing fee for community pharmacists, the market share moved quickly from prescription PPIs to omeprazole OTC. Over the first year of coverage of omeprazole OTC, its share of total PPI claims rose from 0% to 35% in the first 4 months of 2005, compared with 22% share for generic omeprazole claims. Because brand PPIs still accounted for 43% of PPI claims, there was additional cost savings opportunity if more members switched to either omeprazole OTC or generic omeprazole.
EBD is a self-insured plan that comprises Arkansas state employees and public school employees. In 2005, EBD covered approximately 127,500 beneficiaries of whom approximately 78,000 (61%) were employees, yielding a beneficiary-toemployee ratio of approximately 1.63. In 2007, EBD had an annual drug budget of $98.3 million in pharmacy and thirdparty administrative costs. EBD employs a pharmacy benefits management (PBM) company to administer the prescription drug benefit, including adjudicating claims, providing drug coverage strategies and consultative support regarding benefit design, reporting, and rebate support. The pharmacy benefit plan has a 3-tier copayment structure with the following copayments for up to a 31-day supply: $10 for generic, $30 for preferred brand, and $60 for nonpreferred brand.
EBD strives to keep pharmacy costs controlled while maintaining access to medications for its membership. To achieve

What is already known about this subject (continued)
What this study adds this goal, the DUEC meets quarterly to discuss and vote on various clinical and formulary issues. The DUEC decisions are then confirmed, changed, or denied by the State and Public School Life and Health Insurance Board. Any approved changes generally take effect at the beginning of the following calendar quarter, depending on the need for member-specific communication. The DUEC is composed of 3 pharmacists, 4 physicians, 1 registered nurse, 1 state employee, and 1 public school employee. The purpose of this study was 2-fold: to examine PPI utilization and drug costs before and after (a) excluding esomeprazole from coverage (with grandfathering current users) and (b) implementing a therapeutic maximum allowable cost (TMAC), or reference-pricing benefit design, for the PPI class in a large state employee health plan of approximately 127,500 members in 2005, which rose slightly to almost 130,000 members in 2008 and the first quarter of 2009.

Description of the Pharmacy Benefit and Interventions
The PPI interventions for EBD began with a literature search that revealed 3 systematic reviews that found the 5 available PPIs to be similar in tolerability, safety, and efficacy when dosed equipotently for use in the treatment of gastroesophageal reflux disease (GERD), the treatment and prevention of peptic ulcer disease, and for eradicating Helicobacter pylori infection. [4][5][6][7] The literature review showed that the PPIs are a particularly well-tolerated class of drugs. Using this evidence, the DUEC concluded that all PPIs were therapeutically equivalent in efficacy and safety. From an evidence-based perspective, any PPI would be clinically acceptable as the preferred drug. Thus, the EBD considered PPI drug cost in making coverage decisions for PPIs in the pharmacy benefit.
The benefit design structure for PPIs at the beginning of the present study remained as it existed at the end of the previous evaluation that included omeprazole OTC coverage with $5 member copayment and $13 pharmacy dispensing fee; generic omeprazole with a $10 copayment; and brand esomeprazole (Nexium), rabeprazole (Aciphex), pantoprazole (Protonix), and lansoprazole (Prevacid) with nonpreferred $50 copayment per prescription. [1][2][3] The first intervention for the present study began on May 1, 2005, when brand esomeprazole was excluded from coverage, and current users were grandfathered until September 1, 2005 (Table 1). Drugs excluded from plan coverage were eligible for the PBM contractual discount (AWP minus 13% plus $2.50 dispensing fee), and the member was responsible for 100% of the allowed charge for esomeprazole unless grandfathered due to prior use.
The second intervention began on September 1, 2005, when reference pricing was adopted for the entire PPI class, including coverage for esomeprazole. The reference-pricing strategy  provided coverage of any drug in the PPI class at the price per unit for the least expensive drug. The reference price was calculated from the cost for 42 brand omeprazole OTC tablets, using the 14-count packages, and a pharmacy dispensing fee of $13 to compensate for 3 fewer fills per year. This price minus the $5 copayment divided by 42 units determined the maximum plan paid amount of $0.90 per unit. If the patient preferred a PPI other than omeprazole OTC, the patient was responsible for the cost above the plan cost of $0.90 per unit.
Generic prescription omeprazole was not reference priced and remained available at the $10 generic-tier copayment throughout the study period (Table 1). Generic omeprazole was excluded from reference pricing because the plan wanted to ensure members would have access to a less costly PPI, and there was a shortage of omeprazole OTC during 2004. Later, generic omeprazole was excluded from reference pricing because the market price for generic omeprazole was expected to fall substantially. However, by 2007 the price per unit for generic omeprazole was not considerably different from the allowed cost per unit established by the reference price.
The pharmacy benefit design for all covered drugs included copayment tiers $10/$25/$50 per prescription. PPIs were the only therapeutic category for which there was a $5 copayment option (for omeprazole OTC). The $5 PPI option began in March 2004 and remained unchanged throughout the 61-month evaluation period. Beginning in 2007 Q1, copayments for all non-PPI drug categories increased to $10/$30/$60 and remained constant through the end of the evaluation period (March 2009). Members receiving omeprazole OTC paid a $5 copayment. Although the increase in copayments for tier 2 and tier 3 non-PPI drugs may have affected some beneficiaries' abilities to afford other medications, the effect on the ability to afford PPIs was not explored.
The EBD health plan offers a mail-order pharmacy option, but it is used by a small proportion (approximately 0.1%) of the members. Thirty-day and 90-day fills are available to members by mail order or a community pharmacy.
■■ Methods PPI claims were extracted from the EBD pharmacy claims database using Medi-Span (Wolters Kluwer Health, Indianapolis, IN) Generic Product Identifier (GPI) codes beginning with 4,927 for claims with dates of service from March 1, 2004, through March 31, 2009. This time period encompasses the 14 months prior to implementation of the 2 policy changes (preperiod), 4 months of the esomeprazole exclusion from coverage intervention (postperiod 1), and 43 months following the reference-pricing intervention (postperiod 2). Member-months and the PPI cost and utilization data were aggregated by calendar periods to permit pre/post analyses of changes in PPI market share, beneficiary cost (copayment), ingredient cost, dispensing fees, allowed charge (ingredient cost plus dispensing fee), and net plan (EBD) cost after subtraction of beneficiary cost share. Derived measures included utilization and cost per claim, per day of therapy, and per member per month (PMPM). Due to the differences in the number of months in pre/post periods, monthly averages were also calculated for the 3 principal time periods (14 months for the preperiod, 4 months for postperiod 1, and 43 months for postperiod 2). The PPI cost and utilization data were also aggregated by calendar quarter to permit long-term trend analysis. A comparison group was created by the EBD's PBM from 122 self-insured employer health plans and 50 union trust funds. These individual health plans had the ability to implement plan-specific pharmacy benefit designs but none implemented PPI reference pricing during the study period. The health plans in this comparison group were managed by the PBM for the entire study period, and the average eligible membership was 984,731.

■■ Results
The member-month counts and PPI utilization and cost data are aggregated by calendar period in Table 2, and the derived measures per claim, per day, and PMPM are shown in Table 3. Cost and utilization trend data by calendar quarter are shown was $24.95 (or $1.33 PMPM, data not shown). Omeprazole OTC accounted for 35.2% of the PPI pharmacy claims in the 4 months immediately before the first intervention (January-April 2005; Figure 3).

The 4-Month Postperiod 1-Esomeprazole Exclusion
Of the total of 1,448 members who received esomeprazole during the exclusion period, 1,145 (79%) were continuing users and were grandfathered; 303 (21%) were not grandfathered and paid 100% of the cost. During the 4-month esomeprazole-exclusion period (postperiod 1), the omeprazole OTC market share as measured by the number of claims increased from 35.2% to 42.5% (+ 7.3 percentage points; Figure 3). Esomeprazole market share in claims decreased from 16.7% to 12.0% (-4.7 percentage points) with little change in the other in figures 1 and 2. PPI market shares by prescription claims are shown in Figure 3 for time periods associated with the PPI benefit design changes. Cost and utilization data for EBD versus the comparison group are shown in tables 4 and 5 and in Figure 4. All cost data are unadjusted for inflation.

The 14-Month Preperiod
During the 14 months of the preperiod, the average member enrollment was 127,451 per month ( Table 2). The total number of prescriptions was 96,851, or an average of 6,918 per month. The average net cost per claim was $67.77 (Table 3). The average allowed charge per day was $2.81, and the net plan (EBD) cost per day was $2.06. The net plan (EBD) cost PMPM was $3.78. Utilization, measured by the number of claims PMPM, was 0.055 or 1.83 days PMPM. The average copayment per claim

Millions ($)
A llowed Charge ($) b Copayment ($) Net EBD Cost (4) Table 3). The net cost decreased by 10.2% per PPI claim or 12.3% per day, and the net cost PMPM decreased by 10.6% (Table 3). Net cost per month unadjusted for membership was 7.7% lower in postperiod 1 compared with the preperiod ($430,082 vs. $465,746, respectively), or an average reduction in net plan cost of $35,664 per month ( Table  2). The average member copayment per claim was essentially unchanged at $25.06 compared with $24.95 in the preperiod ( Table 3).

The 43-Month Postperiod 2-Reference Pricing for PPIs
Based on analysis of days PMPM, there appeared to be a small decrease in PPI utilization in the initial months of reference pricing in the last 4

PPI Quarterly PMPM Utilization and Drug Cost Trend (inset -2005 detail)
a Utilization is shown as PPI claims per 100 members per month. EBD = Arkansas Employee Benefits Division; PMPM = per member per month; PPI = proton pump inhibitor; Q = quarter; Rx = pharmacy claim.  design changes. The comparison data were composed of a mix of 122 self-insured employer groups and 50 union trust funds that used the PBM during the entire study period. Although these 122 pharmacy benefit plans had the flexibility to implement pharmacy benefit design changes, none adopted reference pricing of PPIs during the period of the present study. Specific information was unavailable regarding the mail-order options in the 122 plans in the comparison group, but the cost and utilization data suggest common use of mail service and/ or quantities greater than 30-day supply for PPI claims (Table  4). Days supply was not provided for the comparison group, preventing calculation of the average days supply per PPI claim to contrast with the approximate average 34 days supply for the EBD group (Table 2). However, the data in Table 4 show an average allowed charge per claim for the comparison group that was nearly twice that for the EBD group in calendar year 2005, and utilization in PPI claims per 100 members per month was about one-half that of the EBD group. The combination of utilization and price (i.e., allowed charge per claim) was $288.37 per 100 member-months for EBD in calendar year 2006 versus $396.23 for the comparison group (Table 4), but the gap narrowed to only an approximate 8% advantage for EBD in calendar year 2008 ($337.16 vs. $365.71).

EBD Versus Comparison Group
Net plan cost was nearly identical for EBD ($3.38) and the comparison group during the esomeprazole-exclusion period, but the EBD costs for the calendar year were composed of $3.93 PMPM during the first 4 months of 2005, $3.38 during 4 months of esomeprazole exclusion, and $1.66 during with the preperiod, but utilization adjusted for enrollment was unchanged at 1.82 days PMPM compared with 1.83 days PMPM during the 14-month preperiod ( Table 3). The net cost per claim decreased by $32.01 (47.2%) from an average of $67.77 in the preperiod to $35.76 in postperiod 2.
Price, as measured by the average allowed charge (drug cost plus pharmacy dispensing fee) per PPI claim, dropped by 37.0% ($34.69), from an average $93.71 during the preperiod to $59.02 in the 43-month reference-pricing period. Adjusted for days supply per claim, the price per PPI day of therapy dropped accordingly by 38.4% ($1.08), from $2.81 in the preperiod to $1.73 in 43 months of reference pricing. After consideration of the average decrease of $1.68 per PPI claim in member cost share (copayment), the net plan cost per day of PPI drug therapy dropped by $1.01 (49.0%), from $2.06 to $1.05 during 43 months of reference pricing. Adjusted for membership, the net plan cost PMPM decreased by $1.87 (49.5%) from $3.78 in the 14-month preperiod to $1.91 PMPM during 43 months of reference pricing ( Table 3). The reductions in PMPM costs represented lower plan spending for the 43 months of reference pricing of approximately $9.4 million or an average of $219,534 per month compared with the preperiod, or $7.9 million ($183,870 per month) compared with the esomeprazoleexclusion period (preperiod 1).

Comparison Group
The key measures of PMPM cost, average charge per claim, utilization rate, and cost share were compared with comparison data obtained from the same PBM in an attempt to better isolate the effects on PPI cost and utilization of the 2 plan member disruption was anticipated with the 2 benefit design changes as members transitioned to alternate therapies or forewent filling a prescription in anticipation of increased out-ofpocket expense for high-cost brand PPIs. However, overall PPI utilization was not adversely affected by reference pricing. Our finding of no effect of reference pricing on PPI utilization may contrast with the TMAC studies because our follow-up period was much longer. 8,9 Redistribution of plan cost onto members via higher copayments was avoided in this intervention as evidenced by a 6.7% decrease in average copayment per claim from $24.95 for the preperiod to $23.27 during 43 months of reference pricing. The average copayment per claim was essentially unchanged during the esomeprazole-exclusion period compared with the preperiod and decreased by approximately 7% during reference pricing compared with the 4-month period of esomeprazole exclusion. Beginning January 1, 2007, the EBD plan increased copayments from $5/$10/$25/$50 to $5/$10/$30/$60 per prescription; for omeprazole OTC; and for tier 1, 2, and 3 drugs, respectively. The reference-pricing strategy effectively capped what the plan would pay for any PPI prescription with the exception of generic omeprazole and was not based on the copayment tier placement. The plan's increase in copayments for all nonreference-priced drugs in tiers 2 or 3 did not directly affect costs for this class of drugs because the copayment for omeprazole OTC and generic omeprazole remained the same; members who received omeprazole OTC or generic omeprazole continued to pay $5 or $10 copayments, respectively. Members who received any other PPI continued to pay a copayment calculated by the difference in the price of the PPI compared with the reference price as measured by the price per unit instead of a dollar copayment. It is unknown to what degree the increase in the dollar copayments for tier 2 and tier 3 drugs affected the utilization of PPIs, but overall utilization of PPIs did not change over the 61 months in the present study, and average member cost share as a percentage of the allowed charge per claim declined slightly in 2007 through 2009 Q1 compared with 2006.

Five-Year Examination of Utilization and Drug Cost Outcomes Associated with Benefit Design Changes Including Reference Pricing for Proton Pump Inhibitors in a State Employee Health Plan
The short-lived esomeprazole-exclusion period (postperiod 1) was associated with a small change in the combined omeprazole OTC and generic omeprazole share from approximately 57% in the preceding 14-month period to approximately 61%. Although the precise effect of grandfathering current esomeprazole users could not be determined, a total of 1,448 utilizing members continued esomeprazole, 1,145 (79%) were grandfathered, and 303 (21%) were not grandfathered and paid 100% of the cost. Other branded PPI market shares remained essentially unchanged during esomeprazole exclusion. In the pre/post comparison, net plan costs decreased by -10.6% from $3.78 PMPM to $3.38 PMPM, and the allowed charge decreased by -7.3% from $5.15 PMPM to $4.78 PMPM.
Reference pricing, by contrast, was associated with a quick reference pricing in the last 4 months of the year (

■■ Discussion
Many different strategies exist to control costs of pharmacy benefits. An evaluation of a small U.S. employer described a 92% reduction in PMPM cost for heartburn drugs when a TMAC strategy was applied to all agents used to treat heartburn. 8 Although cost reduction for the TMAC intervention was dramatic, a drop in utilization of more than 50% factored significantly in the cost reduction for the plan sponsor. In another study, a Canadian TMAC intervention for PPIs was associated with an 11.7% reduction in average cost per day and an 11.9% decrease in utilization for PPI users in an employer-based plan, but this intervention did not include an OTC product. 9 Both of these interventions were associated with reduced plan costs, but the evaluations showed decreases in utilization by the members or increased member cost share.
The present study of this large state-employee health plan describes the relatively unsuccessful attempt at cost savings with the exclusion of a single product, esomeprazole, followed by successful reference pricing of the entire class. The reference-pricing strategy was associated with no reduction in PPI utilization, a small but favorable 6.7% reduction in the average member copayment per PPI claim, and a large effect on the average PPI price associated with an increase in the share of PPIs attributable to generic omeprazole and omeprazole OTC from approximately 61% in the 4 months immediately preceding reference pricing (i.e., the esomeprazole-exclusion period) to 86% in 2009 Q1. In the pre/post comparison, net plan cost savings PMPM were approximately 50% for reference pricing compared with the 14-month period before the 2 benefit design changes or 44% for comparison of 43 months of reference pricing versus the 4-month period of esomeprazole exclusion that immediately preceded reference pricing.
Utilization, as measured by claims PMPM, decreased to a low point of 0.047 in 2006 Q1 but rebounded quickly and steadily increased to 0.059 claims PMPM in 2009 Q1, which exceeded the utilization of 0.055 claims PMPM in the 14-month baseline period. The initial decrease was not unexpected because some  10 How these national data compare with EBD net plan cost of $2.19 PMPM in 2009 Q1 is not known. PPI net price and net cost per day are unfortunately not available from national data sources. The ratios of generic omeprazole and omeprazole OTC in the EBD plan in the most recent period (2009 Q1) were 32.1% and 53.7%, respectively. Some of the generic omeprazole utilization with a $10 copayment per claim versus $5 copayment for omeprazole OTC may be explained by the small difference in the copayment amounts because generic omeprazole was not subject to reference pricing. Some of generic omeprazole utilization might also be explained by some patients using a higher dose of 1 generic omeprazole 40 mg tablet rather than two 20 mg tablets of omeprazole OTC. A small amount of generic omeprazole versus omeprazole OTC use might be explained by new members or new PPI users who may not be fully aware of the benefit design features and therapeutic alternatives. The influence of patient or prescriber perception of lower efficacy with OTC products is also unknown.
Savings in this pharmacy benefit plan could have been larger if generic omeprazole had been subject to reference pricing ( Figure 5). In the first 4 months of reference pricing, generic omeprazole accounted for 3.5% of all PPI claims, but the proportion increased to 32.1% in the last 3 months of the and dramatic change in PPI market shares (Figure 3). Upon the implementation of reference pricing, all brand products were limited to the maximum plan paid price per unit of $0.90. During the first 4 months of reference pricing, the omeprazole OTC market share increased from 42.5% to 77.1%, and the combined share of omeprazole OTC and generic omeprazole was over 80%. In the pre/post comparison, net plan costs decreased by almost 50% during 43 months of reference pricing, associated with an increase in the proportion of generic omeprazole and omeprazole OTC to approximately 86% of all Omeprazole OTC Versus Generic Omeprazole Rx Share a a Market share represents the percentage of claims within the PPI class. OTC = over-the-counter; PPI = proton pump inhibitor; Q = quarter; Rx = pharmacy claim. omeprazole from reference pricing had been rescinded and the reference price per unit had been reset to adjust for changes in the PPI market over time.
study period in 2009 Q1 ( Figure 6). By 2009 Q1, the unit cost of omeprazole OTC averaged $0.68 while generic prescription omeprazole had edged back up to an average cost of $0.85 per unit. Excluding generic omeprazole from reference pricing was important during 2005 when there were shortages of omeprazole OTC, but this decision might have been revisited in subsequent periods when the supply of omeprazole OTC stabilized and the acquisition price of generic omeprazole changed. Generic pantoprazole also became available during the study period, and because its cost exceeded the PPI reference price, the cost was capped by the reference price. Cost savings from new generic PPIs are automatic because all PPIs are subject to the reference price. Accordingly, the initially higher costs of single-source generic products are also not paid by the plan sponsor because all products are capped at the reference price.

Limitations
This study assessed drug cost and utilization outcomes and did not consider other clinical or service outcomes. Second, the study did not account for administrative costs associated with implementing the policy, although the increase in dispensing fees to $13 per omeprazole OTC claim for pharmacy dispensing costs was included in the evaluation. Third, the absence of actual claims data for the comparison group precluded a more definitive difference-in-difference analysis. We also could not determine the mix of benefit designs in the comparison group other than the absence of reference pricing for PPIs, and we were not able to compare the 2 groups by demographic characteristics.

■■ Conclusions
Whereas previous studies of managed care interventions have achieved savings by excluding coverage of nonpreferred PPIs or applied a type of reference pricing to PPIs (e.g., TMAC), the reported savings were associated with increased member cost share and reduction in PPI utilization. The present study shows that PPI drug cost savings for the plan sponsor were attained with rapid and sustained reduction in plan cost as well as reduction in the average price per day of PPI therapy, both with negligible effects on utilization and member cost share. The present study found reductions in PMPM costs representing reduced plan spending of approximately $9.4 million over 43 months of reference pricing compared with the preperiod. When compared with a group of health plans not utilizing PPI reference pricing, the net plan (EBD) estimated PPI cost savings were $7.2 million over 43 months or an average of $1.31 PMPM. These savings were associated with essentially unchanged PPI utilization in days of therapy PMPM, a 6.7% reduction in member copayment per PPI claim, and an increase in the average pharmacy dispensing fee per PPI claim. Cost savings may have been larger if the exclusion of generic